Foreign Portfolio Investors (FPIs) have pumped Rs 47,148 crore in the Indian equities in June, making it the highest inflow in 10 months, enthused by the country's steadily improving macroeconomic fundamentals. However, inflows in July may be subdued as FPIs might adopt cautious stance due to the recent comments from the US Federal Reserve, Mayank Mehraa, Smallcase manager and principal partner at financial consultancy Craving Alpha, said. Besides, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said FPIs are likely to turn a bit cautious going forward as valuations in the country are rich from a short-term perspective.
However, a net amount of Rs 11,119 crore was withdrawn from the debt segment during the same period. This translated into a net investment of Rs 1,003 crore.
In a dazzling resurgence, foreign investors have graced the Indian equity markets with an influx of nearly Rs 1.5 lakh crore in 2023, fuelled by optimism over the country's resilient economic fundamentals amid shadows of a gloomy global scenario. Experts believe that the positive trend may continue in 2024. This follows Indian equities witnessing the worst-ever net outflow of Rs 1.21 lakh crore by FPIs in 2022 on aggressive rate hikes by the central banks globally after net inflows for three consecutive years.
Dhaval Kapadia, Director, Portfolio Specialist, Morningstar Investment Adviser (India) answers queries
'Investors should allocate about 5% to 10% to such funds.'
'For the same level of return, you can reduce portfolio volatility significantly with a 10% to 15% exposure to international funds.'
TMFs invest in a public index, so investors know beforehand which instruments the fund will invest in.
The value of foreign portfolio investors' (FPI) holdings in the domestic equities reached $584 billion at the end of December 2022, which was 11 per cent lower from preceding year, according to a Morningstar report. This was largely on low return given by the Indian equities and exodus of foreign money from the domestic stock market. Going by the report, the value of FPIs investments in Indian equities dropped to $584 billion as of December 2022 as compared to $654 billion at the end of December 2021.
Contributions to mutual fund schemes through systematic investment plans or SIPs remain unfazed from the market volatility in 2022 with inflow growing to Rs 1.5 lakh crore in 2022, a surge of 31 per cent from a year earlier, due to higher retail participation. In comparison, an inflow of Rs 1.14 lakh crore through the route was registered in 2021 and Rs 97,000 crore in 2020, data with the Association of Mutual Funds in India (AMFI) showed. Going ahead, SIP numbers are expected to continue to remain strong in 2023 as investors are increasingly appreciating the importance of regular investing through the route, Kaustubh Belapurkar, director - manager research at Morningstar Investment Adviser India, said.
Amid current geopolitical challenges and a slowdown in global growth, veteran emerging market investor Mark Mobius called India a safe haven for investors, backed by a stable government. The renowned investor, who is excited about the opportunities available in India, said the country is now the second largest in the portfolio of Mobius Capital Partners after Taiwan. Calling India a "land of opportunities and innovation", he said that his optimism about India is driven by the stable government and young demographic, with an average age of 27 years.
While seniors seeking a regular income should switch to debt funds from balanced funds, younger investors should invest in balanced funds after understanding their risks.
After declining for three consecutive quarters, the value of FPI investment in Indian equities rose 8 per cent quarter-on-quarter to $566 billion in the July-September period, according to a Morningstar report on Wednesday. A fast-changing global macroeconomic landscape, sentiments and opportunities that the Indian equity markets have to offer impacted the direction of flows by Foreign Portfolio Investors (FPIs). Through the quarter, the value of the FPI holdings in domestic equities surged by 8 per cent to $566 billion from $523 billion recorded in the previous quarter.
ETFs may be an option if you are considering only large-cap funds, experts tell Tinesh Bhasin.
You cannot manage the risk in your portfolio if you have no idea how to recognise it.
Monitor how long the high cash position lasts. If it lasts for a month or two, it is fine. But if it continues for a couple of quarters, seek your advisor's opinion on whether to exit the fund.
While debt funds have emerged as the flavour of the season, not all investors understand debt funds. So the best they can do is put trust in the fund manager and the fund house.
Foreign investors pumped in Rs 11,119 crore in the Indian equities in December, making it the second consecutive monthly inflow, despite increasing concerns over the re-emergence of Covid-19 cases in some parts of the world. However, foreign portfolio investors (FPIs) have turned cautious in recent days. The inflow in December was much lower compared to Rs 36,239 crore invested by FPIs in the month of November, data with the depositories showed.
The value of foreign portfolio investment (FPI) in Indian equities was at $542 billion in the March quarter of 2023, a decline of 11 per cent from the preceding year, largely due to the exodus of foreign money from the domestic market, according to a Morningstar report. In comparison, the value of FPI in Indian equities was $612 billion in the January-March quarter of 2022. On a quarter-on-quarter basis, the value of FPI in Indian equities fell by 7 per cent from $584 billion recorded in the three months ended December 2022.
Foreign Portfolio Investors (FPIs) have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September, primarily due to rising US interest rates, recessionary fears, and overvalued domestic stocks. Before the outflow, FPIs were incessantly buying Indian equities in the last six months from March to August and brought in Rs 1.74 lakh crore during the period. Mayank Mehra, smallcase, manager and principal partner at Craving Alpha,believes that strong economic growth prospects, attractive valuations, and government reforms could support foreign investment flows in the next month.
However, it is noteworthy that foreign investors pumped in money on the day of election results as the mandate became clear
The Rs 38-trillion mutual fund (MF) industry is going through a new fund offer (NFO) rush. Since July 1, the industry has launched close to 70 NFOs. This follows the completion of a near three-month embargo period when the industry had vowed to not launch any new offerings till the time it implemented norms around pooling of investor accounts. As a result, between April and June 2022, the industry was able to launch just three NFOs.
This could be attributed to the attractive valuation of the Indian equities after the sharp correction during the first quarter of calendar year 2020 and significant depreciation of the Indian rupee against USD, which provided them a rather good entry point.
Morningstar India's investment conference from November 1-2, 2012 in Mumbai for retail investors, brokers, financial advisors.
For investors, every cost-saving means higher returns.
Waves of foreign portfolio investments worth over Rs 51,000 crore splashed into the Indian market in 2021 as overseas investors turned net buyers of domestic securities for the third straight year while excess global liquidity and other factors steered the ebb and flow of their investing ways. With the global financial system still flush with liquidity, emerging market assets, especially equities, might well remain the preferred investment avenue for many more months to come, experts opined. As the equities sizzled during most of 2021, that also saw economy slowly coming back into the recovery path, Foreign Portfolio Investors (FPIs) turned net buyers but their investment is much less compared to net inflows of Rs 1.03 lakh crore in 2020.
'As the interest rates rise, people are going to say why should I be taking big risks when I can get 4 to 5 per cent in a bank account.' 'So, I think you have to change your thinking.' 'You need to look at the balance sheet, look at dividends.' 'These issues that have been ignored.'
After withdrawing record funds in 2021-22, foreign portfolio investors (FPIs) continued their sell-off in the last fiscal too and pulled out Rs 37,631 crore from Indian equities amid aggressive rate hikes by central banks globally. The outflow trend is likely to reverse in the current financial year since India has the best growth potential in the financial year 2023-24 (FY24), VK Vijayakumar, chief investment strategist at Geojit Financial Services, said. Market analysts believe that FPI flows in the current financial year would be decided by a host of factors, such as the US Federal Reserve's policy stance, oil prices movement and development in the geopolitical situation.
The field of behavioural finance says articulating an investing philosophy and then sticking with it can help investors avoid the mistakes that often arise with ad-hoc investing.
However, they put in Rs 2,744 crore in the debt markets during the period under review.
Geopolitical tensions in different parts of the globe and slowdown in global economy led investors to opt for safe-haven like gold over the last one year.
The value of the foreign portfolio investors (FPI) holdings in the domestic equities reached $592 billion in three months ended June 2021, a surge of 7 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of robust net inflows from FPIs, coupled with the strong performance of the Indian equity markets. "As of the quarter ended June 2021, the value of FPI investments in Indian equities stood at $592 billion, which was considerably higher than the $552 billion recorded in the previous quarter, a spike of around 7 per cent," the report noted. As of June 2020, the value of FPI investments in Indian equities had been $344 billion.
While there's tax arbitrage advantage in ULIPs now, experts say investors should prefer mutual funds for long-term savings.
The net inflows into active equity mutual fund (MF) schemes registered more than a twofold month-on-month rise in August, crossing Rs 20,000 crore, the highest in five months. This rise in net inflows was boosted by an 18 per cent growth in gross investments, driven by a record Rs 15,800 crore inflow through the systematic investment plan (SIP) route and Rs 5,000 crore collected by seven new fund offers (NFOs) in the active equity space, reveals data released by the Association of Mutual Funds in India (Amfi). Moreover, redemptions moderated in August, declining by 19 per cent to Rs 24,580 crore, after staying elevated in the previous three months owing to profit booking.
If you plan to invest in an FD, go for the 12-15-month tenure. This will allow you to redeploy maturity proceeds at higher rates (if rates rise), advises Sarbajeet K Sen.
Gold exchange traded funds (ETFs) witnessed a net outflow of Rs 199 crore in January, making it the third monthly withdrawal in a row, with investors preferring equities over other segments on buoyant record SIP flow. This was in comparison to a net outflow of Rs 273 crore registered in the segment in December and Rs 195 crore in November. Prior to that, Gold ETFs attracted Rs 147 crore in October, data with Association of Mutual Funds in India (Amfi) showed.
Investors are yet to warm up to the concept of sustainable investing with sustainable or ESG (environmental, social, and governance) funds in India witnessing outflows of Rs 315 crore in 2021-22. This comes following a staggering inflow of Rs 4,884 crore in FY 2020-21. Prior to that, sustainable funds saw an infusion of over Rs 2,000 crore, according to data compiled by Morningstar India.
With this, the total SIP contribution in the first seven months of the current financial year rose to Rs 57,607 crore as compared with Rs 52,472 crore in April-October 2018, according to the latest data from the Association of Mutual Funds in India (Amfi).
Gross inflows into active equity mutual fund (MF) schemes dipped 34 per cent month-on-month (MoM) -- to Rs 25,400 crore -- in April as investors applied brakes on lump sum investments amid a sharp upwards movement in the market. Gross inflows for March stood at Rs 38,641 crore. The sharp decline pulled the net inflows to a five-month low of Rs 6,480 crore, shows data released by the Association of Mutual Funds in India (Amfi).
Mutual funds have launched a clutch of new fund offers in the silver ETF (exchange traded fund) category this year and collected Rs 1,400 crore in assets after the introduction of the newly-created investment asset class by market regulator Sebi in 2021. Further, fund houses including Kotak Asset Management Company have filed draft documents with the markets regulator to float silver ETF as well as silver ETF fund of funds for investors, information with the Securities and Exchange Board of India (Sebi) showed. These NFOs (new fund offers) are providing an opportunity to the investors to digitally invest and own silver which is easily tradable during market hours.
Balanced funds are suitable for investors who have low-risk appetite or are new to equities.Those with more than seven-year investment horizon should look at funds that have higher equity exposure.
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